When it comes to product sourcing, Alibaba and DHGate are two of the most popular sites on the internet. Both have their pros and cons, but which one is better?
In this article, we will compare Alibaba vs DHgate and try to answer that question.
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What is Alibaba?
Alibaba was started in 1999 and has now become one of the most popular ways to buy products manufactured in China.
It’s a business-to-business trading company that offers an “online shopping mall” connecting over 150,000 suppliers with over 10 million buyers from 190 countries.
It was founded by Chinese businessman Jack Ma and is one of the largest companies in the world. The online trading platform connects manufacturers with buyers looking to source global products in bulk.
Is Alibaba safe?
The short answer is yes, Alibaba is definitely a safe, legitimate website. It is one of the largest, most well-known companies in the world and is traded on the New York Stock Exchange.
However, like with any online marketplace, there are always going to be a few bad apples. The key is to simply do your due diligence and be aware of the potential risks before you make any kind of purchase.
Plus, as we’ll discuss shortly you have the added benefit of trust factors like Alibaba’s guarantee.
What are the pros of Alibaba?
Alibaba is the most popular sourcing platform for international buyers for very good reason. Here are the main reasons Alibaba continues attracting global buyers year after year.
Product range
With over 150,000 manufacturers who sell products in over 5,900 different categories, there is an incredible range of products that can be found on Alibaba. All the way from fridge magnets to factory machinery – there’s a category for pretty much all small and medium retailers.
Vetting of sellers
The ability to filter suppliers by different levels of certifications and verified status is an invaluable feature of Alibaba.
When shopping online for suppliers, buyers can use Alibaba to filter for verified businesses – those that have been individually inspected by Alibaba – and also for suppliers offering certain certifications and purchase guarantees.
Security of Trade Assurance
Trade Assurance is an Alibaba initiative that gives buyers the confidence that they are using trusted sellers.
With the Trade Assurance option, you can pay for your goods in confidence knowing that if the final product does not arrive as described then you can start the process of claiming a refund.
Flexibility of payment options
Not only do most sellers offer reasonable prices, they also offer flexible payment terms and options. Most manufacturers will accept a 30/70 payment structure – 30% paid upfront with the 70% balance paid on completion of manufacturing.
Payment options on Alibaba range from traditional wire transfers through to PayPal and credit cards. However you prefer to pay, most small or medium retailers will find an ideal option to suit their needs.
RFQ requests
The RFQ option allows potential buyers to submit their preferences for a product in one place and send that out to a range of suppliers who will then contact the buyer.
This saves the manual time of contacting each supplier one by one.
Extra services
Alibaba also provides a range of extra services to help make the process of sourcing from reliable sellers a smooth experience. Examples include quality control services to ensure you only ever export high-quality products.
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What are the cons of Alibaba?
Alibaba isn’t without its downsides which can sometimes have buyers looking for alternative options like DHgate. Here are the main challenges you might come up against when using the online shopping giant.
Minimum order quantity thresholds
Whereas when buying through a site like AliExpress or perhaps a local supplier you may be able to buy a small number of units at a time, Alibaba vendors will have a higher minimum order quantity.
It isn’t a platform suited to a dropshipping business model and is instead more geared towards private label brands.
The higher minimum order quantity that an Alibaba supplier will set makes it a bigger investment for new business owners to come up with.
Unclear pricing
It’s nigh on impossible to get a clear price when simply browsing Alibaba. So if you’re just starting out on Amazon and carrying out some product research you may want to check the profitability of a potential product.
To get a real clear idea of final pricing you will have to start conversations with a number of suppliers as the prices displayed on the front end of Alibaba fluctuate so much and can’t be relied upon.
Potentially inflated prices
The majority of buyers on the Alibaba platform are overseas and Chinese suppliers know that. They expect Western customers to have deep pockets and often start negotiations at relatively higher price points.
This means you will need to speak to many suppliers regarding the same product and negotiate well to find the most suitable supplier at the best low prices.
Poor messaging system
Trying to communicate with multiple different suppliers on the Alibaba platform is a frustrating experience. It is clunky and nowhere near as intuitive as messaging services we’ve all become very used to like WhatsApp.
You can choose to take communications off Alibaba, but be careful if you do. Trade Assurance relies upon the communications carried out on Amazon.
To be safe, always recap key conversations including product specifics inside Alibaba in case the customer support team ever need to review your case.
What is DHgate?
DHgate is an online shopping portal similar to Alibaba founded in 2004 by Diane Wang. Prior to launching DHGate, Wang founded Joyo.com, an online shopping platform that would later be sold to Amazon.
DHgate is located in Beijing and has grown substantially in size over recent years to become one of the biggest rivals to Alibaba.
Is DHgate safe?
Much like Alibaba, DHgate is as safe as online shopping platforms that introduce two parties to a transaction can be. As DHgate are only an intermediary there is only so much that can be done to create safety, but it does everything it can to provide a reliable marketplace.
What are the pros of DHgate?
The incentive to use DHgate vs Alibaba is not necessarily in cheap products as both are comparable on pricing. But there are a few unique pros of using DHgate, so lets explore them.
Buyer protection
Whereas Alibaba only offers protection for sellers who choose to enrol to the guarantee scheme, DHgate provides buyer protection on every order.
The scheme includes a full refund if you don’t receive your order, and a partial refund if you’re not happy with the quality of the goods. This alone is a very helpful feature that helps protect against questionable suppliers.
Mutiple payment methods
DHgate offers a range of payment options making it convenient for buyers to transact on the site in their local currency. If you’re looking for an independent payment provider to transact at efficient exchange rates, then you’ll find them on DHgate.
Quicker response time
DHgate suppliers tend to be quicker to respond to customer enquiries. When you contact suppliers in other countries the time difference can be incredibly frustrating and mean you’re only gradually moving forward every 24 hours.
The slightly more responsive nature on the DHgate store can help with that.
What are the cons of DHgate?
Like most businesses, DHgate also has its weaknesses. Let’s take a look at the key negatives.
Smaller range of products
Alibaba is by far and away the bigger platform with more choice of suppliers and products. This means that when searching DHgate you will always be left wondering if there are better and cheaper options on Alibaba.
Fewer contact options
There aren’t as many contact supplier options within DHgate – just the two in fact. You can contact suppliers via email and chat, whereas on Alibaba you have four total contact options available to you.
This isn’t a great concern due to the better response times but is worth noting.
Separate shipping process
Whilst this con isn’t strictly exclusive to DHgate vs Alibaba, it is worth noting that with each of these platforms you will be required to cover shipping costs separately to the bulk order of products.
This is relatively standard, but can come as a shock to new Amazon sellers and paid shipping options need to be taken into account.
DHgate vs Alibaba: Payment option comparison
The Alibaba vs DHgate comparisons will rumble on for years to come because there are so many similarities. One such similarity is the fact that both allow multiple payment methods.
You can pay by wire transfer, credit card, PayPal and more. So whichever you choose you will no doubt find an option with good payment security that is convenient for you.
How to improve your experience with Alibaba or DHgate
When transacting through the Alibaba, DHgate website or any other overseas supplier platform you need to ensure you do your due diligence.
Even though the platforms themselves do everything they can to ensure maximum safety for buyers, every platform has its bad actors and you should do what you can to stay out in front of any potential issues.
Vet suppliers
To do this, make sure you use the available filters to sort for reliable suppliers with proven track records and verified statuses.
Then be sure to fully vet suppliers with thorough communication and a good test of a sample to ensure you’re not sourcing fake products or low-quality products.
Pay with Trade Assurance
Next, use a safe and secure platform like Alibaba to protect yourself should anything go wrong with your order. If you do the sourcing process right it very rarely does, but it doesn’t hurt to have that extra protection.
Pay balance on passing inspection
Finally, only pay the balance on your manufacturing invoice when you have carried out a third party inspection for quality assurance purposes and your products have passed the inspection.
Alibaba vs DHgate: Which is better?
There really isn’t a huge amount of difference in the DHgate vs Alibaba comparison but Alibaba is by far and away the bigger, most popular choice of sourcing platform for private label sellers looking to save money on bulk orders.
Almost all suppliers found on the DHgate website would also be found on the Alibaba website, so it really doesn’t appear that you would be missing out on anything in particular by sourcing only through Alibaba.
If you want to learn our entire process for selecting, sourcing, and selling a highly profitable product on Amazon and beyond, check out our free training here.
Inside the training, you’ll find a number of templates to help you get started along with a complete supplier script so you know exactly what to say to suppliers on Alibaba.
